The following are the details in respect of two processes “A” and “B” of a process industry:
|
Process A Rs. |
Process B Rs. |
|
|
Materials |
20,000 |
– |
|
Labour |
24,000 |
40,000 |
|
Overheads |
12,000 |
20,000 |
|
Closing Stock |
8,000 |
16,000 |
The output of Process A is transferred to Process B at a price calculated to give a profit of 20% on the transfer price and the output of Process B is charged to finished stock on a similar basis.
Of the output transferred to finished stock, the stock costing Rs. 20,000 remained unsold at the end of the accounting period and the balance realized was Rs. 2,00,000. There was no opening stock and no closing WIP. Show:
- Process accounts and total profits
- Value of closing stocks for balance-sheet purpose